Expanding TennCare would be an expensive Band-Aid; don't do it | Opinion

Medicaid expansion is becoming a perennial debate topic, even in fiscally conservative red states like Tennessee. Policymakers should resist the temptation and instead focus on what the outcomes have been in states that have expanded under Obamacare.

Thirty-three states and Washington, D.C., have expanded Medicaid eligibility since the Affordable Care Act passed in 2010, allowing them to expand government insurance coverage to able-bodied adults under 138 percent of the federal poverty level. Seventeen states, including Tennessee and six of our bordering states, have not expanded Medicaid. Proponents of the expansion effort have made various claims in favor of expansion such as better health outcomes with more access to care, free money from the federal government, and a way to stop rural hospitals from closing.

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It is important to understand the enormous cost of TennCare, Tennessee’s Medicaid program, to state taxpayers before even discussing expansion as a possibility. TennCare costs Tennesseans $12 billion, eating up nearly a third of the state’s $37.5 billion total budget. To put that in perspective, Tennessee is spending approximately $32.8 million per day on TennCare. It is simply unrealistic to think we can expand our TennCare population by a minimum of 250,000 people (some estimates put that number even higher) and be able to sustain the program over time.

States that have expanded Medicaid have seen far greater enrollment than originally projected. Ohio, for example, estimated approximately 400,000 people would enroll if the state expanded. As of 2018, that number is almost double, with more than 700,000 new people now enrolled in the state’s Medicaid program. Which brings me to this notion of “free money” that proponents argue we are giving up if we do not expand. I hate to break it to them, but this is not free money. Expansion would be paid for with new federal taxpayer dollars, borrowed from our children and grandchildren, that are not guaranteed in the future. This could potentially put our state at risk to either shell out additional state taxpayer dollars to cover the expanded population or go through the painful process of kicking hundreds of thousands of people off the program.

Even if we had the money to expand, it would not lead to better health outcomes or access to care. Oregon randomly selected more than 6,000 adults to receive Medicaid coverage and studied this expansion population compared to the pool of people not selected to receive the coverage. The study found that people who received Medicaid generally felt better about their health, but there were no significant improvements in their health outcomes. They also did not find any change in visits to the emergency room or hospital admissions. In fact, a study by the Senate Homeland Security and Governmental Affairs Committee actually found that expansion exasperated the opioid epidemic, a problem that Tennessee continues to grapple with.

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Expanding Medicaid also does not prevent rural hospital closures. It is true that rural hospitals are closing across the country, but Medicaid expansion is not a silver bullet to stop them from closing. Rural hospitals have still closed in expansion states like California, Kentucky, Illinois, Minnesota, Ohio, Pennsylvania, Massachusetts, Arizona and Michigan, to name just a few. In Tennessee, there have been closures, but most are because of consolidations with other hospitals nearby or a reduction in local population. Many of the facilities continue to provide access to care in some way such as urgent care, emergency care and outpatient services.

Policymakers should continue to resist the temptation to expand TennCare. Expansion is an expensive Band-Aid to a broken health care system. Instead, they should look at how Tennessee can lead the nation with innovation by expanding tele-health opportunities, increasing access to direct primary care, repealing antiquated and anti-competitive certificate-of-need laws, and bringing cost transparency to consumers. There are ways to expand access to quality health care for our most vulnerable. Expanding TennCare is not one of them.

Stephanie Whitt is the executive vice president of the Beacon Center of Tennessee, a free market think tank. She previously served as an assistant commissioner at the Tennessee Department of Human Services.